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Ocado downgrade hits shares, Cerillion up 8%
This summer’s hot streak for Ocado shares continues to fade after the grocery technology stock was hit by another City downgrade today.
The M&S retail partner fell 4% or 20.7p to 510.1p, a level that contrasts with over 950p when talk of Amazon bid interest triggered a buying frenzy in July.
The latest downtrend in the wild ride for Ocado shareholders came as analysts at Barclays cut their stance to “underweight” with a new lower price target of 430p.
The move comes a month after a similar downgrade by counterparts at BNP Paribas Exane caused Ocado shares to lose a fifth of their value in one session.
The technology stock posted the biggest fall in today’s blue-chip session, with the FTSE 100 index down by 12.17 points at 7587.43. The FTSE 250 index lost 36.42 points to 17,417.80.
Sentiment remains fragile, particularly with earnings figures due later this week from major US companies including Goldman Sachs, Tesla, Netflix and Procter & Gamble.
On Friday, strong results by JPMorgan Chase were overshadowed by chief executive Jamie Dimon’s warning that the world may be facing the most dangerous time in decades.
The defensive positioning of investors meant shares in Imperial Brands lifted 13.5p to 1725p, while Shell added 28p to 2750p as Brent Crude traded above $90 a barrel.
Small cap stocks in demand included green energy firm ITM Power after it announced plans for an “accelerated, asset-light” entry into the US market.
The Sheffield-based company, whose electrolyser systems are used in the generation of green hydrogen, rose 3% or 2.4p to 71.6p.
Cerillion, the AIM-listed provider of software for billing, charging and customer relationship management, jumped 8% or 90p to 1150p after it said annual profits will be “meaningfully ahead” of the City’s forecast £14.3 million.
With its pipeline of new customers growing, the London-based company expects to make further progress in the 2024 financial year.
Liberum upped its price target to 1400p and said shares had been unfairly treated after a profit warning by Spirent Communications led to fears of slower demand from telecoms customers.
The broker said: “Today’s trading update demonstrates that these fears are mis-placed.”
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